CJEU Case C-524/15 / Judgment

Criminal proceedings against Luca Menci
Policy area
Justice, freedom and security
Deciding body type
Court of Justice of the European Union
Deciding body
Court (Grand Chamber)
Type
Decision
Decision date
20/03/2018
ECLI (European case law identifier)
ECLI:EU:C:2018:197
  • CJEU Case C-524/15 / Judgment

    Key facts of the case:

    Reference for a preliminary ruling — Value added tax (VAT) — Directive 2006/112/EC — Failure to pay VAT due — Penalties — National legislation which provides for an administrative penalty and a criminal penalty for the same acts — Charter of Fundamental Rights of the European Union — Article 50 — Ne bis in idem principle — Criminal nature of the administrative penalty — Existence of the same offence — Article 52(1) — Limitations to the ne bis in idem principle — Conditions.

    Outcome of the case:

    On those grounds, the Court (Grand Chamber) hereby rules:

    1. Article 50 of the Charter of Fundamental Rights of the European Union must be interpreted as not precluding national legislation in accordance with which criminal proceedings may be brought against a person for failing to pay value added tax due within the time limits stipulated by law, although that person has already been made subject, in relation to the same acts, to a final administrative penalty of criminal nature for the purposes of Article 50 of the Charter, on condition that that legislation

    • pursues an objective of general interest which is such as to justify such a duplication of proceedings and penalties, namely combating value added tax offences, it being necessary for those proceedings and penalties to pursue additional objectives,
    • contains rules ensuring coordination which limits to what is strictly necessary the additional disadvantage which results, for the persons concerned, from a duplication of proceedings, and
    • provides for rules making it possible to ensure that the severity of all of the penalties imposed is limited to what is strictly necessary in relation to the seriousness of the offence concerned.

    2. It is for the national court to ensure, taking into account all of the circumstances in the main proceedings, that the actual disadvantage resulting for the person concerned from the application of the national legislation at issue in the main proceedings and from the duplication of the proceedings and penalties that that legislation authorises is not excessive in relation to the seriousness of the offence committed.

  • Paragraphs referring to EU Charter

    1) This request for a preliminary ruling concerns the interpretation of Article 50 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and of Article 4 of Protocol No 7 to the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’).

    ...

    16) In those circumstances, the Tribunale di Bergamo (District Court, Bergamo) decided to stay proceedings and to refer the following question to the Court for a preliminary ruling: ‘Does Article 50 of the Charter …, interpreted in the light of Article 4 of Protocol No 7 to the [ECHR] and the related case-law of the European Court of Human Rights, preclude the possibility of conducting criminal proceedings concerning an act (non-payment of VAT) for which a final administrative penalty has been imposed on the defendant?

    ...

    17)  By its question, the referring court asks, in essence, whether Article 50 of the Charter, read in the light of Article 4 of Protocol No 7 to the ECHR, must be interpreted as precluding national legislation in accordance with which criminal proceedings may be brought against a person for failing to pay VAT due within the time limit stipulated by law, although that person has already been made subject, in relation to the same acts, to a final administrative penalty.

    ...

    21) Since they seek to ensure the proper collection of VAT and to combat fraud, administrative penalties imposed by the national tax authorities and criminal proceedings initiated in respect of VAT offences, such as those at issue in the main proceedings, constitute implementation of Articles 2 and 273 of Directive 2006/112 and of Article 325 TFEU and, therefore, of EU law for the purposes of Article 51(1) of the Charter (see, to that effect, judgments of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 27, and of 5 April 2017, Orsi and Baldetti, C‑217/15 and C‑350/15, EU:C:2017:264, paragraph 16). Therefore, they must respect the fundamental right guaranteed by Article 50 of the Charter.

    22) Moreover, although, as Article 6(3) TEU confirms, the fundamental rights recognised by the ECHR constitute general principles of EU law and although Article 52(3) of the Charter provides that the rights contained in the Charter which correspond to rights guaranteed by the ECHR are to have the same meaning and scope as those laid down by that convention, the latter does not constitute, as long as the European Union has not acceded to it, a legal instrument which has been formally incorporated into EU law (judgments of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 44, and of 15 February 2016, N., C‑601/15 PPU, EU:C:2016:84, paragraph 45 and the case-law cited).

    23) According to the explanations relating to Article 52 of the Charter, paragraph 3 of that article is intended to ensure the necessary consistency between the Charter and the ECHR, ‘without thereby adversely affecting the autonomy of Union law and... that of the Court of Justice of the European Union’ (judgments of 15 February 2016, N., C‑601/15 PPU, EU:C:2016:84, paragraph 47, and of 14 September 2017, K., C‑18/16, EU:C:2017:680, paragraph 50 and the case-law cited).

    24) Therefore, examination of the question referred must be undertaken in the light of the fundamental rights guaranteed by the Charter and, in particular, Article 50 thereof (see, to that effect, judgment of 5 April 2017, Orsi and Baldetti, C‑217/15 and C‑350/15, EU:C:2017:264, paragraph 15 and the case-law cited).

    25) Article 50 of the Charter provides that ‘no one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law’. Therefore, the ne bis in idem principle prohibits a duplication both of proceedings and of penalties of a criminal nature for the purposes of that article for the same acts and against the same person (see, to that effect, judgment of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 34).

    ...

    27) Although it is for the referring court to assess, in the light of those criteria, whether the criminal and administrative proceedings and penalties at issue in the main proceedings are criminal in nature for the purposes of Article 50 of the Charter, the Court, when giving a preliminary ruling, may nevertheless provide clarification designed to give the national court guidance in its assessment (see, to that effect, judgment of 5 June 2014, Mahdi, C‑146/14 PPU, EU:C:2014:1320, paragraph 79 and the case-law cited).

    28) In this case, it should be noted at the outset that the classification as criminal, in the light of the criteria noted in paragraph 26 of the present judgment, of the criminal proceedings at issue in the main proceedings and the penalties that are liable to result therefrom, is not at issue. The question arises, on the other hand, whether the administrative procedure involving Mr Menci and the final administrative penalty imposed on him following that procedure are criminal in nature, for the purposes of Article 50 of the Charter.

    ...

    30) Nevertheless, the application of Article 50 of the Charter is not limited to proceedings and penalties which are classified as ‘criminal’ by national law, but extends regardless of such a classification to proceedings and penalties which must be considered to have a criminal nature on the basis of the two other criteria referred to in paragraph 26 of the present judgment.

    31) As regards the second criterion, relating to the intrinsicnature of the offence, it must be ascertained whether the purpose of the penalty at issue is punitive (see judgment of 5 June 2012, Bonda, C‑489/10, EU:C:2012:319, paragraph 39). It follows therefrom that a penalty with a punitive purpose is criminal in nature for the purposes of Article 50 of the Charter, and that the mere fact that it also pursues a deterrence purpose does not mean that it cannot be characterised as a criminal penalty. As the Advocate General stated in point 113 of his Opinion, it is of the intrinsicnature of criminal penalties that they seek both to punish and to deter unlawful conduct. By contrast, a measure which merely repairs the damage caused by the offence at issue is not criminal in nature.

    32) In this case, Article 13(1) of Legislative Decree No 471/97 provides, in the event of a failure to pay VAT due, for an administrative penalty which is added to the amount of VAT to be paid by the taxable person. Although that penalty is, as is contended by the Italian Government in its written observations, reduced where the tax is actually paid within a certain time limit after the failure to pay, the fact remains that the late payment of VAT due is punished by that penalty. It thus appears, which moreover corresponds with the referring court’s assessment, that that penalty has a punitive purpose, which is the hallmark of a penalty of a criminal nature for the purposes of Article 50 of the Charter.

    33) As regards the third criterion, it should be noted that the administrative penalty at issue in the main proceedings consists, in accordance with Article 13(1) of Legislative Decree No 471/97, of a fine of 30% of the VAT due which is added to the payment of that tax, and, without that being contested by the parties to the main proceedings, has a high degree of severity which is liable to support the view that that penalty is of a criminal nature for the purposes of Article 50 of the Charter, which it is however for the referring court to determine.

    ...

    34) It follows from the very wording of Article 50 of the Charter that it prohibits prosecuting or imposing criminal sanctions on the same person more than once for the same offence (see, to that effect, judgment of 5 April 2017, Orsi and Baldetti, C‑217/15 and C‑350/15, EU:C:2017:264, paragraph 18). As is stated by the referring court in its order for reference, the different proceedings and penalties of a criminal nature at issue in the main proceedings are directed against the same person, namely Mr Menci.

    35) According to the Court’s case-law, the relevant criterion for the purposes of assessing the existence of the same offence is identity of the material facts, understood as the existence of a set of concrete circumstances which are inextricably linked together which resulted in the final acquittal or conviction of the person concerned (see, by analogy, judgments of 18 July 2007, Kraaijenbrink, C‑367/05, EU:C:2007:444, paragraph 26 and the case-law cited, and of 16 November 2010, Mantello, C‑261/09, EU:C:2010:683, paragraphs 39 and 40). Therefore, Article 50 of the Charter prohibits the imposition, with respect to identical facts, of several criminal penalties as a result of different proceedings brought for those purposes.

    36) Moreover, the legal classification, under national law, of the facts and the legal interest protected are not relevant for the purposes of establishing the existence of the same offence, in so far as the scope of the protection conferred by Article 50 of the Charter cannot vary from one Member State to another.

    ...

    39) In those circumstances, it appears that the national legislation at issue in the main proceedings allows criminal proceedings to be brought against a person, such as Mr Menci, in respect of an offence consisting in the failure to pay VAT due on the basis of the tax return for a tax year, after the imposition on that person, in respect of the same acts, of a final administrative penalty of a criminal nature for the purposes of Article 50 of the Charter. Such a duplication of proceedings and penalties constitutes a limitation of the fundamental right guaranteed by that article.

    ...

    40) It should be noted that, in its judgment of 27 May 2014, Spasic (C‑129/14 PPU, EU:C:2014:586, paragraphs 55 and 56), the Court ruled that a limitation to the ne bis in idem principle guaranteed by Article 50 of the Charter may be justified on the basis of Article 52(1) thereof.

    41) In accordance with the first sentence of Article 52(1) of the Charter, any limitation on the exercise of the rights and freedoms recognised by that Charter must be provided for by law and respect the essence of those rights and freedoms. According to the second sentence of Article 52(1) thereof, subject to the principle of proportionality, limitations to those rights and freedoms may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.

    ...

    43) Moreover, national legislation, such as that at issue in the main proceedings, respects the essential content of Article 50 of the Charter, since, according to the information in the case file before the Court, it allows such a duplication of proceedings and penalties only under conditions which are exhaustivelydefined, thereby ensuring that the right guaranteed by Article 50 is not called into question as such.

    ...

    55) Secondly, the duplication of penalties of a criminal nature requires rules allowing it to be guaranteed that the severity of all of the penalties imposed corresponds with the seriousness of the offence concerned, that requirement resulting not only from Article 52(1) of the Charter, but also from the principle of proportionality of penalties set out in Article 49(3) thereof. Those rules must provide for the obligation for the competent authorities, in the event of the imposition of a second penalty, to ensure that the severity of all of the penalties imposed does not exceed the seriousness of the offence identified.

    ...

    60) Finally, in so far as the Charter contains rights which correspond to rights guaranteed by the ECHR, Article 52(3) of the Charter provides that their meaning and scope are the same as those laid down by that convention. It is therefore necessary to take account of Article 4 of Protocol No 7 to the ECHR for the purpose of interpreting Article 50 of the Charter (see, to that effect, judgments of 15 February 2016, N., C‑601/15 PPU, EU:C:2016:84, paragraph 77, and of 5 April 2017, Orsi and Baldetti, C‑217/15 and C‑350/15, EU:C:2017:264, paragraph 24).

    ...

    62) Therefore, the conditions to which Article 50 of the Charter, read in conjunction with Article 52(1) thereof, subjects a possible duplication of criminal proceedings and penalties and of administrative proceedings and penalties of a criminal nature, as is apparent from paragraphs 44, 49, 53, 55 and 58 of the present judgment, ensure a level of protection of the ne bis in idem principle which is not in conflict with that guaranteed by Article 4 of Protocol No 7 to the ECHR, as interpreted by the European Court of Human Rights.

    63) In the light of all of the above considerations, the answer to the question referred is that Article 50 of the Charter must be interpreted as not precluding national legislation in accordance with which criminal proceedings may be brought against a person for failing to pay VAT due within the time limits stipulated by law, although that person has already been made subject, in relation to the same acts, to a final administrative penalty of a criminal nature for the purposes of Article 50 of the Charter, on condition that that legislation

    • pursues an objective of general interest which is such as to justify such a duplication of proceedings and penalties, namely combating VAT offences, it being necessary for those proceedings and penalties to pursue additional objectives,
    • contains rules ensuring coordination which limits to what is strictly necessary the additional disadvantage which results, for the persons concerned, from a duplication of proceedings, and
    • provides for rules making it possible to ensure that the severity of all of the penalties imposed is limited to what is strictly necessary in relation to the seriousness of the offence concerned.

    ...

    65) Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

    On those grounds, the Court (Grand Chamber) hereby rules:

    1. Article 50 of the Charter of Fundamental Rights of the European Union must be interpreted as not precluding national legislation in accordance with which criminal proceedings may be brought against a person for failing to pay value added tax due within the time limits stipulated by law, although that person has already been made subject, in relation to the same acts, to a final administrative penalty of criminal nature for the purposes of Article 50 of the Charter, on condition that that legislation

    • – pursues an objective of general interest which is such as to justify such a duplication of proceedings and penalties, namely combating value added tax offences, it being necessary for those proceedings and penalties to pursue additional objectives,
    • – contains rules ensuring coordination which limits to what is strictly necessary the additional disadvantage which results, for the persons concerned, from a duplication of proceedings, and
    • – provides for rules making it possible to ensure that the severity of all of the penalties imposed is limited to what is strictly necessary in relation to the seriousness of the offence concerned.

    2. It is for the national court to ensure, taking into account all of the circumstances in the main proceedings, that the actual disadvantage resulting for the person concerned from the application of the national legislation at issue in the main proceedings and from the duplication of the proceedings and penalties that that legislation authorises is not excessive in relation to the seriousness of the offence committed.